NEW YORK – Billionaire Warren Buffett’s Berkshire Hathaway Inc. said Thursday it joined forces with Brazilian investment fund 3G Capital to purchase U.S. food giant H.J. Heinz for $28 billion, including the assumption of outstanding debt.
“Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products. Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes. We are very pleased to be a part of this partnership,” Buffett said.
Berkshire and 3G Capital are paying $72.50 per share for H.J. Heinz, a premium of 20 percent over the $60.48 closing price on Wednesday.
The deal is the largest ever in the food industry, Berkshire Hathaway said in a statement.
“The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders,” Heinz chairman, president and CEO William R. Johnson said.
Berkshire and 3G will pay cash for the maker of the iconic Heinz ketchup brand, introduced in 1876, and Ore-Ida potato snacks, and will assume about $5 billion in outstanding debt, raising the deal’s value to $28 billion.
“This is my kind of deal and my kind of partner,” the 82-year-old Buffett told CNBC. “Heinz is our kind of company with fantastic brands, but I have a file on Heinz that goes back to 1980.”
3G Capital will manage Heinz, the billionaire investor said, adding that Berkshire Hathaway was putting $12 billion or $13 billion into the deal.
3G, which bought Burger King in 2010 and controls several other companies, such as Belgian-Brazilian beverage giant InBev, is run by Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
Heinz will keep its headquarters in Pittsburgh, Pennsylvania, but will be a private company after the deal closes.
H.J. Heinz, which was founded in 1869, employs about 32,000 people around the world and has operations in more than 50 countries. EFE